Google Goes Retail With New Service

Google Wallet mobile payment systemGoogle is expanding its search-engine capabilities to not only include finding things on the Web, but to buy things on the Web.

The Google retail service–currently in beta phase–looks at the outset like an emulation of Amazon, but linked to Google search results. However, Google doesn’t intend to create a network of warehouses full of goods and become a retailer like Amazon, but aims to build partnerships with online retailers and possibly couriers for delivery.

Google wants to connect shoppers with merchants via the Web and mobile phones and benefit by selling ads to merchants, according to a person briefed on the project. Eventually Google hopes the delivery service would be integrated into its Android mobile devices and Google Plus, the person said.

The Google shipping service looks to be an attempt to compete with Amazon Prime. Yet Google’s service is said to be modeled after GSI Commerce’s ShopRunner, which charges consumers $79 a year to get free two-day shipping on eligible items from a small network of top retailers. If Google decides to tie the shipping service to Local Availability, it could list shopping search results as “in stock” and “1-day shipping,” while charging the retailer.

However, the natural question online retailers may have is if Google will then skew any of its shopping search results in favor of its partners. If Google decides to move forward with the project, the service would start in San Francisco, New York, and a few other cities.

The move is part of Google’s larger strategy of breaking into the online retail space, where Google is playing catch-up. Other parts of this strategy include Google Wallet to make payments via cellphone, Google’s version of Groupon called Google Offers, and location-based apps and product search for local stores.